SEC looks into Sprint's tax collection practices

The probe follows the state of New York's claim that the carrier stiffed the state out of $100 million in taxes.

Sprint Nextel said today that the Securities and Exchange Commission is looking into the company's tax collection practices, following a related lawsuit filed by the state of New York.

In April, New York Attorney General Eric Schniederman filed a lawsuit against the Overland Park, Kan., wireless carrier, alleging it had stiffed New York state out of $100 million in taxes. Schniederman sought $300 million as a penalty.

Specifically, the suit deals with whether Sprint properly collected taxes from its customers to be paid to New York.

The SEC probe could suggest that the issue goes beyond New York. Sprint said it is complying with the requests and doesn't believe it is breaking any laws.

"Because the New York Attorney General's lawsuit and complaint is without merit, Sprint...intends to continue defending the matter vigorously," the company said in a statement.

In June, Sprint filed to have the New York lawsuit dismissed , arguing that its practices don't violate New York law.

Sprint argues that under Schniederman's suit, New York consumers are expected to pay higher taxes.

About the author

Roger Cheng is the executive editor in charge of breaking news for CNET News. Prior to this, he was on the telecommunications beat and wrote for Dow Jones Newswires and The Wall Street Journal for nearly a decade. He's a devoted Trojan alum and Los Angeles Lakers fan.


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